McDonald's (MCD) 10-K risk factor changes: FY2024 vs FY2023

For the fiscal year ended December 31, [removed: 2023][added: 2024]

[removed: ][added: ]

The aggregate market value of the registrant's common stock held by non-affiliates as of June [removed: 30, 2023: 217,448,941,822.][added: 28, 2024: 182,778,968,633.]

The number of shares outstanding of the registrant’s common stock as of January 31, [removed: 2024: 722,051,488.][added: 2025: 714,461,139.]

Part III of this Form 10-K incorporates information by reference from the registrant’s [removed: 2024] [added: 2025] definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2023.][added: 2024.]

| | | | | | | Management's Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [8](#i6d278eb3cca24d478428bd1e8807ef56_19)] [added: [7](#i6d278eb3cca24d478428bd1e8807ef56_19)] | | |

| | | | | | | Management's View of the Business | | | [removed: [8](#i6d278eb3cca24d478428bd1e8807ef56_22)] [added: [7](#i6d278eb3cca24d478428bd1e8807ef56_22)] | | |

| | | | | | | [removed: 2023] [added: 2024] Financial Performance | | | [8](#i6d278eb3cca24d478428bd1e8807ef56_25) | | |

| | | | | | | Cash Flows | | | [removed: [20](#i6d278eb3cca24d478428bd1e8807ef56_37)] [added: [21](#i6d278eb3cca24d478428bd1e8807ef56_37)] | | |

| | | | | | | Legal Proceedings | | | [removed: [35](#i6d278eb3cca24d478428bd1e8807ef56_61)] [added: [37](#i6d278eb3cca24d478428bd1e8807ef56_61)] | | |

| | | | | | | Properties | | | [removed: [35](#i6d278eb3cca24d478428bd1e8807ef56_64)] [added: [37](#i6d278eb3cca24d478428bd1e8807ef56_64)] | | |

| | | | | | | Information About our Executive Officers | | | [removed: [36](#i6d278eb3cca24d478428bd1e8807ef56_67)] [added: [38](#i6d278eb3cca24d478428bd1e8807ef56_67)] | | |

| | | | | | | Availability of Company Information | | | [removed: [37](#i6d278eb3cca24d478428bd1e8807ef56_70)] [added: [39](#i6d278eb3cca24d478428bd1e8807ef56_70)] | | |

| | | | | | | Financial Statements and Supplementary Data | | | [removed: [37](#i6d278eb3cca24d478428bd1e8807ef56_73)] [added: [39](#i6d278eb3cca24d478428bd1e8807ef56_73)] | | |

| | | | | | | Controls and Procedures | | | [removed: [65](#i6d278eb3cca24d478428bd1e8807ef56_217)] [added: [69](#i6d278eb3cca24d478428bd1e8807ef56_217)] | | |

| | | | | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [65](#i6d278eb3cca24d478428bd1e8807ef56_220)] [added: [69](#i6d278eb3cca24d478428bd1e8807ef56_220)] | | |

| | | | | | | [Exhibits and Financial Statement Schedules](#i6d278eb3cca24d478428bd1e8807ef56_223) | | | [removed: [66](#i6d278eb3cca24d478428bd1e8807ef56_223)] [added: [70](#i6d278eb3cca24d478428bd1e8807ef56_223)] | | |

| | | | | | | Form 10-K Cross-Reference Index | | | [removed: [68](#i6d278eb3cca24d478428bd1e8807ef56_226)] [added: [72](#i6d278eb3cca24d478428bd1e8807ef56_226)] | | |

| | | | | | | [Signatures](#i6d278eb3cca24d478428bd1e8807ef56_229) | | | [removed: [69](#i6d278eb3cca24d478428bd1e8807ef56_229)] [added: [73](#i6d278eb3cca24d478428bd1e8807ef56_229)] | | |

Forward-looking statements can also be identified by the use of forward-looking or conditional words, such as “could,” “should,” “can,” “continue,” “aim,” “estimate,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “confident”, [removed: “commit”, "potential"] [added: “commit,” “enable,” “potential”] and [removed: "trajectory"] [added: “trajectory”] or similar expressions.

In particular, statements regarding the Company's plans, strategies, prospects and expectations regarding its business and industry, as well as [removed: environmental, social] [added: environmental] and [removed: governance ("ESG")] [added: social impact initiatives] and similar commitments, are forward-looking statements.

For the year ended December 31, [removed: 2023,] [added: 2024,] there were no material changes to the Company's corporate structure or in its method of conducting business.

Refer to the Segment and Geographic Information section on page [removed: [49](#i6d278eb3cca24d478428bd1e8807ef56_169)] [added: [52](#i6d278eb3cca24d478428bd1e8807ef56_169)] of this Form 10-K for additional information.

The Company franchises and [added: owns and] operates McDonald’s restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries.

Of the [removed: 41,822] [added: 43,477] McDonald's restaurants at year-end [removed: 2023,] [added: 2024,] approximately 95% were franchised.

In addition, there is the International Developmental Licensed Markets & Corporate segment, which includes the results of over 75 [removed: countries,] [added: countries] as well as Corporate activities.

One of the strengths of the franchising model is that the expertise from [removed: operating] Company-owned [added: and operated] restaurants allows McDonald’s to improve the operations and success of all restaurants while innovations from franchisees can be tested and, when viable, efficiently implemented across relevant restaurants.

In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing [removed: strategies that will ultimately benefit McDonald’s restaurants.][added: strategies.]

The Company’s revenues consist of sales by [removed: Company-operated] [added: Company-owned and operated] restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates.

McDonald's Corporation [removed: 2023] [added: 2024] Annual Report 3

[added: These investments,] developed in collaboration with franchisees, are designed to cater to consumer preferences, improve local business performance and increase the value of the McDonald's brand through the development of modernized, more attractive and higher revenue generating restaurants.

The Company generally does not invest any [added: restaurant] capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.

While developmental license and affiliate arrangements are largely the same, affiliate arrangements are used in a limited number of foreign markets (primarily China and Japan) within the International Developmental Licensed Markets [added: & Corporate] segment as well as a limited number of individual restaurants within the International Operated Markets segment, where the Company also has an equity investment and records its share of net results in equity in earnings of unconsolidated affiliates.

The Company’s people strategies aim to [removed: create] [added: support] an inclusive environment that represents the communities in which [removed: we operate.][added: it operates.]

To do this, the Company [removed: continues to evaluate and evolve compensation and benefits programs to remain locally relevant and competitive,] offers quality training and learning opportunities and upholds high standards of health and safety [added: designed] to create and maintain a safe and respectful workplace for its employees.

You can find more information about the Company's human capital management and related initiatives [added: in our 2023-2024 Purpose & Impact Report and] on the “Our Purpose & Impact” section of [removed: its website, which is updated annually.][added: the Company’s website.]

[removed: Our People][added: People]

Company employees, which include those in the Company's corporate and other offices as well as in Company-owned and operated restaurants, totaled over 150,000 worldwide as of year-end [removed: 2023,] [added: 2024,] of which approximately 70% were based outside of the U.S. In addition to Company employees, the over two million individuals who work in McDonald's franchised restaurants around the world are critical to the Company’s success, enabling it to drive long-term value creation and further its purpose and mission.

[removed: Our Commitment] [added: Commitment] to Inclusion

[removed: At McDonald’s, inclusion] [added: Inclusion] is one of [removed: our five Core Values, and we strive] [added: the Company’s core values, which it strives] to integrate [removed: our values] into [removed: our] business operations to deliver an inclusive experience for [removed: our] stakeholders—including employees, franchisees, suppliers, customers and the communities [removed: we serve.][added: in which the Company operates.]

| | | | | | | Cybersecurity | | | [35](#i6d278eb3cca24d478428bd1e8807ef56_2510) | | |

In support of the Company’s values, the Company’s annual incentive plan holds the Chief Executive Officer ("CEO") and Executive Officers accountable for efforts that drive employee engagement and our values.

Grounded in the Company's values, the Company believes in treating everyone with dignity, fairness and respect, always.

There are four guiding principles the Company applies to evaluate its work: (i) our system thrives when we are shaped by the communities in which we operate, (ii) our early and full adoption of inclusion gives us a competitive advantage, (iii) individuals perform their best when they feel they belong and (iv) our priority is to be a responsible business, acting lawfully and being responsive to the business environment.

Safe & Respectful Workplaces

The Company believes that it has a responsibility to help protect the health and safety of anyone who works at or enters a McDonald’s restaurant, a concept that is incorporated into Company policies, codes of conduct and guiding principles.

The Company is committed to promoting safety in all of the Company’s corporate and other offices and Company-owned and operated restaurants, as well as supporting franchisees to do the same in the restaurants they own and operate.

The Company also works to foster respectful workplaces, where people can be themselves without fear of harassment, discrimination, retaliation or violence, and to help its franchisees do the same in their workplaces.

The Company's existing procedures include several ways that an individual can report an incident or raise a concern.

The Company requires all restaurants to maintain their own reporting process.

In addition, the Global Business Integrity Line is available to anyone and allows for concerns to be reported anonymously.

The Company also strives to weave human rights into its day-to-day practices, helping fulfill its commitment to respect the rights of all people and communities who produce, serve, and enjoy McDonald’s food.

The Company’s commitment to respect human rights is set out in its Human Rights Policy and is in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs).

In addition to the Human Rights Policy, the Company has standards, principles and policies to reinforce a culture of integrity and respect, forming the foundation of its efforts to feed and foster communities worldwide.

As part of its efforts to promote respect for human rights through its standards, the Company has specifically set policies and guidance to help address and protect populations that may be most vulnerable to human rights violations.

For example, the Company’s Responsible and Ethical Recruitment Principles outline standards to prevent the exploitation of migrant workers and ensure responsible recruitment for this population at all McDonald’s restaurants.

Additional information about the Company’s human rights approach and focus areas, as well as related policies and standards, can be found on the "Human Rights" section of the Company's website.

The Company follows Global Pay Principles to ensure that fair pay practices are understood and consistently implemented for all Company employees; these principles enforce its understanding that pay should be competitive, non-discriminatory, performance-based, understandable, and compliant with all applicable legal and regulatory requirements and standards.

The Company aims to build strong and inclusive connections that deliver on the needs of the communities McDonald’s serves, because the Company believes that doing so is consistent with the Company’s business objectives and values.

The Company is focused on partnering with organizations that share the Company’s core values, harnessing its size and influence to help maximize collective impact, while also strengthening relationships with the communities in which it operates.

The Company’s strategy focuses on three key strategic outcome areas - Supporting Families, Times of Need, and Opportunity Employment.

The Company is proud to support Ronald McDonald House Charities (“RMHC”) and their global network of over 255 local chapters in more than 60 countries and regions in their mission to provide essential services to remove barriers, strengthen families and promote healing when children need healthcare.

PURPOSE & IMPACT

The Company prioritizes the environmental, social and governance issues that are of the highest importance to its stakeholders and where it believes the business can have the greatest impact to create long-term, sustainable value.

The Company’s Impact Strategy is centered around four Impact Areas: Our Planet; Food Quality & Sourcing; Jobs, Inclusion & Empowerment; and Community Connection.

Within these Impact Areas, the Company has established certain strategies, goals, policies and performance indicators.

The Company periodically reports progress on the “Purpose & Impact” section of its website.

The Company requires periodic third-party food safety audits of suppliers to verify compliance with its food safety and quality standards.

The audits help ensure that suppliers are meeting McDonald’s Supplier Quality Management System (SQMS) standards.

In addition, the Company promotes the consistency of its core menu by regular sensory evaluations and calibration trainings.

A digital transformation project is underway to promote data excellence and continuous measures on quality and food safety performance.

The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates.

In 2024, global comparable sales decreased 0.1%.

- Comparable sales in the U.S. increased 0.2%, benefiting from average check growth, partly offset by negative comparable guest counts.

- Comparable sales in the International Operated Markets segment decreased 0.2%, reflecting mixed results across the markets.

Negative comparable sales across some markets, led by France, was partly offset by positive comparable sales in most markets.

- Comparable sales in the International Developmental Licensed Markets segment decreased 0.3%.

The continued impact of the war in the Middle East and negative comparable sales in China more than offset positive comparable sales in Latin America and Japan.

Earnings and cash flow growth rates presented below were impacted in 2024 by restructuring charges associated with *Accelerating the Organization* and net charges primarily consisting of transaction costs, property sale gains and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel.

This includes everyday low-price options on our menu, affordable meal bundles, limited-time deals and personalized value and digital offers available in our mobile app.

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These investments,

Under the leadership of its Board of Directors, the Company adheres to a global diversity, equity, and inclusion ("DEI") strategy which is critical to its success.

The DEI strategy is designed to drive efforts across the System to better represent the diverse communities in which McDonald’s operates, to accelerate cultures of inclusion and belonging, upholding human rights and cultivating a respectful workplace that is ethical, truthful and dependable, and to further dismantle barriers to economic opportunity.

Additionally, it includes:

- ongoing efforts at all levels of the Company to help improve the representation of women globally and underrepresented groups in the U.S.;

- a commitment to equal pay among Company employees with comparable job responsibilities, experience, performance, and contributions, as well as fair treatment in access, opportunity and advancement for all;

- the Company’s Mutual Commitment to Diversity, Equity and Inclusion (“MCDEI”), a pledge that invites the Company’s U.S.-based suppliers to commit to efforts toward DEI progress within their own organizations, draws on McDonald’s size and scale, and highlights its opportunity to accelerate meaningful change for employees, franchisees, suppliers, customers, and communities;

- a recruitment initiative designed to increase the number of franchisees from all backgrounds, including underrepresented groups in the Company’s U.S. and International Operated Markets segments, by reducing upfront equity requirements for eligible franchisee candidates and providing ongoing learning and development; and

- best practice sharing with franchisees and suppliers to support them in furthering inclusion within their own organizations.

To reinforce the importance of the Company’s values, the Company’s annual incentive plan includes financial performance metrics, as well as strategic measures that hold executives accountable for efforts towards the Company’s DEI ambitions.

Please see the Company’s Global Diversity, Equity and Inclusion Report on the Company's website, which reflects data on employee, Board and franchisee representation, as well as diverse-owned supplier spend and equal pay.

Respectful Workplace Environment

Fostering safe, inclusive and respectful workplaces, wherever McDonald's does business, has been integral to the Company for its more than 65-year history.

The Company understands the importance of providing a positive experience and making everyone feel valued, both in its offices and in McDonald's restaurants.

The Company’s commitment to human rights is set forth in its Human Rights Policy and is furthered by its Standards of Business Conduct, which apply to Company employees, and its Supplier Code of Conduct, which sets forth human rights requirements for the Company's global suppliers.

Company employees are trained on and are required to annually certify their understanding of, and commitment to upholding, the Standards of Business Conduct.

McDonald’s focus on fostering safe, inclusive, and respectful workplaces starts at the beginning of each restaurant crew member’s recruitment journey.

In 2022, the Company published its Responsible and Ethical Recruitment Principles outlining its commitment to working toward five global standards that apply to migrant labor recruiting practices across the Company, franchisees, and International Developmental licensees.

Additionally, in 2023, the Company became a member of the Leadership Group for Responsible Recruitment, which is a collaborative effort to drive positive change in how the Company recruits migrant workers, and joined the Human Rights Coalition of Consumer Goods Forum, which is a coalition of the largest consumer goods brands working to end forced labor.

As part of its commitment to a respectful workplace environment, the Company recognizes how important it is to provide channels for its employees to report human rights and similar concerns that may violate Company policies and standards.

Employees can do so in many ways, including through an anonymous global reporting channel, the Business Integrity Line, which is staffed by a live operator from an independent company and is available 24 hours a day, 365 days a year.

This is complemented by additional reporting channels in many markets.

The Company expects its employees, franchisees, and suppliers to uphold human rights and cultivate respectful workplaces, which builds trust, protects the integrity of the McDonald's brand and fuels Systemwide success.

The Company continuously emphasizes the importance of pay that is competitive, non-discriminatory, performance-based, transparent, and compliant with legal and regulatory standards.

McDonald’s embraces its role and commitment to the communities it serves.

Through its Youth Opportunity program, the Company aims to reduce barriers to employment for two million youth by 2025 through supporting pre-employment job readiness training, employment opportunities and workplace development programs.

The Company is also proud to support the network of over 260 local chapters of Ronald McDonald House Charities (“RMHC”) spanning over 60 countries and regions that creates, finds and supports programs that directly improve the health and well-being of children and their families.

In addition, the Company maintains a Global Food Disposition Policy to help support its suppliers and distributors around the world in disposing of food in alignment with McDonald’s food waste hierarchy, enabling food donations wherever possible.

The Policy, which aims to avoid food waste and loss while also allowing the System to meet the needs of local communities, is a critical part of the Company's sustainability work and its purpose to feed and foster communities.

The Company continues to bring its community impact strategy to life and enhance its support efforts because its business thrives when its communities thrive.

ENVIRONMENTAL MATTERS

The Company prioritizes action and progress across a range of environmental matters, and endeavors to improve its long-term sustainability and resiliency, which benefit the System and the communities McDonald's serves.

The Company monitors environmental regulations and stakeholder expectations to be well positioned to respond in a timely and appropriate manner, as it cannot predict the precise nature of how these matters will continue to evolve.

Although any impact would likely vary by geographic region and/or market, the adoption of new environmental laws or regulations may increase costs and/or operational complexity for the Company.

To guide its management of environmental matters and to strengthen its resiliency, the Company has developed goals and commitments that are informed by relevant frameworks, including the Taskforce on Climate-Related Financial Disclosures (TCFD).

These include initiatives to reduce Systemwide greenhouse gas emissions, support deforestation free sourcing throughout the Company's global supply chain, efficiently manage natural resources and support biodiversity, responsibly source ingredients and packaging, and increase the availability of recycling in restaurants to reduce waste.

These are areas of increasing importance to the Company and its stakeholders and where the Company believes it can have an impact and help to drive industry-wide change.

In recent years, the Company has made significant progress on many of its global goals and commitments.

| | | | Item 1C | | | Cybersecurity | | | Page [removed: [34](#i6d278eb3cca24d478428bd1e8807ef56_2510)] [added: [35](#i6d278eb3cca24d478428bd1e8807ef56_2510)] | | |

| | | | Item 2 | | | Properties | | | Page [removed: [35](#i6d278eb3cca24d478428bd1e8807ef56_64)] [added: [37](#i6d278eb3cca24d478428bd1e8807ef56_64)] | | |

| | | | Item 3 | | | Legal Proceedings | | | Page [removed: [35](#i6d278eb3cca24d478428bd1e8807ef56_61)] [added: [37](#i6d278eb3cca24d478428bd1e8807ef56_61)] | | |

| | | | Item 7 | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | Page [removed: [8](#i6d278eb3cca24d478428bd1e8807ef56_19)] [added: [7](#i6d278eb3cca24d478428bd1e8807ef56_19)] | | |

| | | | Item 8 | | | Financial Statements and Supplementary Data | | | Page [removed: [37](#i6d278eb3cca24d478428bd1e8807ef56_73)] [added: [39](#i6d278eb3cca24d478428bd1e8807ef56_73)] | | |

| | | | Item 9A | | | Controls and Procedures | | | Page [removed: [65](#i6d278eb3cca24d478428bd1e8807ef56_217)] [added: [69](#i6d278eb3cca24d478428bd1e8807ef56_217)] | | |

| | | | Item 9B | | | Other Information | | | Page [69](#i6d278eb3cca24d478428bd1e8807ef56_2620) | | |

| | | | Item 10 | | | Directors, Executive Officers and Corporate Governance | | | Page [removed: [36](#i6d278eb3cca24d478428bd1e8807ef56_67),] [added: [38](#i6d278eb3cca24d478428bd1e8807ef56_67),] (a) | | |

| | | | Item 12 | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | Page [removed: [65](#i6d278eb3cca24d478428bd1e8807ef56_220),] [added: [69](#i6d278eb3cca24d478428bd1e8807ef56_220),] (a) | | |

| | | | Item 15 | | | Exhibits and Financial Statement Schedules | | | Page [removed: [66](#i6d278eb3cca24d478428bd1e8807ef56_223)] [added: [70](#i6d278eb3cca24d478428bd1e8807ef56_223)] | | |

| Signatures | | | | | | | | | Page [removed: [69](#i6d278eb3cca24d478428bd1e8807ef56_229)] [added: [73](#i6d278eb3cca24d478428bd1e8807ef56_229)] | | |

(a) - The information required by this item is incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2023.][added: 2024.]

McDonald's Corporation [removed: 2023] [added: 2024] Annual Report [removed: 68][added: 72]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated below on the [removed: 22nd] [added: 25th] day of February, [removed: 2024:][added: 2025:]

| | | | *Executive Vice President and Global Chief Financial Officer* | | | | | | [removed: *Senior Vice President - Corporate Controller*] [added: *Director*] | | |

| | | | *(Principal Financial Officer)* | | | | | | [removed: *(Principal Accounting Officer)*] | | |

| | | | [removed: *Director*] [added: *Vice President - Chief Accounting Officer and*] | | | | | | [removed: *President, Chief Executive Officer and Director*] [added: *Director*] | | |

| | | | [removed: *Chairman of the Board and Director*] [added: *Director*] | | | | | | [removed: *Director*] [added: *Chairman of the Board of Directors, President, and*] | | |

McDonald's Corporation [removed: 2023] [added: 2024] Annual Report [removed: 69][added: 73]

| | | | February 25, 2025 | | |

| *By* | | | /s/ Ian F. Borden | | | *By* | | | /s/ Michael D. Hsu | | |

| | | | Ian F. Borden | | | | | | Michael D. Hsu | | |

| | | | | | | | | | *Chief Executive Officer* | | |

| *By* | | | /s/ Lauren Elting | | | *By* | | | /s/ Paul S. Walsh | | |

| | | | Lauren Elting | | | | | | Paul S. Walsh | | |

| | | | *Corporate Controller* | | | | | | | | |

| | | | *(Principal Accounting Officer)* | | | | | | | | |

| *By* | | | /s/ Catherine M. Engelbert | | | *By* | | | /s/ Amy E. Weaver | | |

| | | | Catherine M. Engelbert | | | | | | Amy E. Weaver | | |

| *By* | | | /s/ Margaret H. Georgiadis | | | *By* | | | /s/ Miles D. White | | |

| | | | Margaret H. Georgiadis | | | | | | Miles D. White | | |

| | | | | | | | | | | | |

| | | | February 22, 2024 | | |

| *By* | | | /s/ Ian F. Borden | | | *By* | | | /s/ Catherine Hoovel | | |

| | | | Ian F. Borden | | | | | | Catherine Hoovel | | |

| *By* | | | /s/ Catherine M. Engelbert | | | *By* | | | /s/ Paul S. Walsh | | |

| | | | Catherine M. Engelbert | | | | | | Paul S. Walsh | | |

| *By* | | | /s/ Margaret H. Georgiadis | | | *By* | | | /s/ Amy E. Weaver | | |

| | | | Margaret H. Georgiadis | | | | | | Amy E. Weaver | | |

| *By* | | | /s/ Enrique Hernandez, Jr. | | | *By* | | | /s/ Miles D. White | | |

| | | | Enrique Hernandez, Jr. | | | | | | Miles D. White | | |